This study was carried out to investigate Economic impact of taxation on small and medium scale enterprise. To achieve this objective, four research questions and two research hypotheses were formulated to guide the study. The data was collected from primary sources. The primary data were collected with the help of a well-structured questionnaire of two sections administered to staff and management of selected small and medium scale enterprises in Uyo Metropolis. The collected data were analyzed with tables and simple percentages to analyze the research questions chi-square statistical tools were used to test research hypotheses. The study reveals that there is a relationship between economic impact of taxation on small and medium scale enterprise. The study concluded with some recommendations that taxes should be collected in relation to the sizes and profit of SMEs considering all other factors that can constrain the progress of such SMEs as there is a relationship between SMEs sizes and their ability to pay.